Company X pays for performance.Allan, an employee of the company, is not in favor of this reward system and, therefore, leaves Company X in search of another company with different rules for getting rewards.This is an example of the:
A)design effect.
B)compensation effect.
C)sorting effect.
D)incentive effect.

Question

Quizplus · Accepted Answer

This is an example of the sorting effect, where employees self-select into organizations with reward systems that align with their preferences. Allan's decision to leave Company X because of its pay-for-performance system demonstrates that he prefers a different type of reward system and thus, is sorting himself into an organization that fits his preferences better.

Company X Pays for Performance